By Tom Ballard, Chief Alliance Officer, Pershing Yoakley & Associates, P.C.
Marty Altshuler and Rick Henson have known each other since the early part of the 1980s when they were colleagues at another local medical device company. About a decade later, they joined forces to found Choice Medical, Inc., as a specialty distributor for spinal implant companies.
“We put our minds together and came-up with the initial concept,” Altshuler says.
Today, their initial focus on orthopedic and neuro surgery product lines has grown into a family of companies located in the Bearden area of Knoxville, all focused in one way or another on the healthcare market. The group includes the original enterprise plus ChoiceSpine and Choice Orthotics and Prosthetics.
“They are different businesses,” Altshuler says, although both he and Henson cite the complementary nature of the three.
- Choice Medical is a distributor for more than 25 nationally and internationally-recognized companies manufacturing products for spine and total joint implants and spinal and sports medicine bracing offerings.
- Choice Orthotics & Prosthetics, founded in 2004, has a staff of Orthotists who evaluate, make, measure and fit all orthotics – from arch support to back braces to halos for fractures of the neck. Its team of Prosthetists evaluates, makes, measures and fits all prosthetics – for both lower and upper extremities.
- ChoiceSpine, started two years later, focuses on commercializing technically-superior spinal fusion products.
Early on, the duo made a strategic decision regarding how to grow their enterprises.
“We decided not to take venture or angel money,” Henson says. As a result, they have been very strategic in their approach, particularly as they grew their product business. Altshuler says they directed all available revenues from the other businesses into developing products at ChoiceSpine.
One key decision that helped propel the product offerings was the acquisition of Orthotec, a $40 million company. As a result, ChoiceSpine holds exclusive rights in the U.S. market for several patents related to six specific spinal conditions.
In 2015, the company had a monumental development year and introduced four new spinal fusion systems and in total have developed and introduced over thirty products to date.
A key component of the ChoiceSpine strategy is close alignment with key surgeons to help drive future product development. Another is full recognition of the importance of patient satisfaction, particularly in light of the Affordable Care Act (ACA).
ChoiceSpine notes on its webpage that “these innovative and proprietary products, when combined with effective procedures, have a successful track record of producing better quality outcomes in surgical patients.”
While they cite the satisfaction scores their products receive, Altshuler and Henson are also mindful of other impacts the ACA is having on their clients.
“Hospitals are limiting the amount of vendors they are allowing,” Henson says. This means it becomes more challenging for smaller providers like ChoiceSpine to have their products available.
“One hospital chain said it was starting with 10 providers but wanted to reduce the number to three,” he added. “That approach takes the clinical decision out of the doctors’ hands.”
With the growing presence of additive manufacturing expertise in the region including 3D printing, we asked the duo for their thoughts on how this technology could impact their companies.
“Our interest is inventory,” Altshuler said, referring to exactly how much quantity of each product Choice Spine would have to stock at any time.
There’s also the reality that the emerging technology opens new opportunities for companies like ChoiceSpine.
“You can design product now that you cannot make, but could with 3D printing,” Henson added.
And, Altshuler and Henson are pleased with recent actions by the U.S. Congress and President Obama to suspend the Medical Device Act that has been in place since the beginning of 2013. It required companies like ChoiceSpine to pay 2.3 percent of gross sales every month. With this no longer required, the monies are now available to reinvest in new technology and resources to grow their business locally.